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 Send to email | Icahn Win Triggers Yahoo (YHOO) Severance Bonanza. So When Will Carl Give Up and Sell? in YHOO |  By Silicon
el 11-Jun-2008 |
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 Add this to the list of reasons we won't be voting for Carl Icahn's Yahoo (YHOO) slate: If he wins the proxy contest, this will trigger the massive severance-bonus plan Yahoo put in place to fight off Microsoft. This will ensure that whatever management moves Carl's new board makes will cost shareholders a ton of money and put Yahoo even more behind the eight ball.
(Yahoo's executives can't just quit and take the package. But our understanding is executives can resign for "good reason," which leaves a lot of wiggle room. And, if nothing else, the package will make it more expensive for Carl's new CEO to fire a lot of Yahoos, which we suspect would be one of his or her first moves.)
As some readers have pointed out, it's not our vote that matters is Icahn v Yahoo, but the votes of huge shareholders such as Gordon Crawford (Capital Research and Management) and Bill Miller (Legg Mason). After blasting Jerry Yang and Yahoo's board for blowing the Microsoft deal, Gordon has been mum. Bill, meanwhile, has been trimming his position. If we had to guess, we imagine that Gordon and Bill are likely thinking along the same lines we are. Namely:
- Carl Icahn has no real plan for Yahoo other than selling to Microsoft
- This weak negotiating position would likely lead to a takeout in the high-$20s, if that.
Carl says he wants to recruit a new CEO. We think Jerry's actually doing an okay job playing the crappy hand he was dealt, so we're going to need more detail than "fire Jerry" before we get excited about that. Carl also says if Microsoft won't buy the company, he'll run to Google and do a search deal. This is exactly what Yahoo is trying to do now, so, again, we don't see the need to hire Carl's team (at great cost) to do it.
Bottom line? We think Carl Icahn is going to lose this proxy fight. We think he'll probably soon conclude the same thing (if he hasn't already), which means he'll likely want to start unwinding some of his position (which is--or was--mostly options). If Carl bails, so will his hedge fund friends--Boone Pickens, Dan Loeb, John Paulson, et al. This will put even more pressure on the stock.
See Also:
More Icahn Insults For Yahoo Reveal That Carl Has Little More To Say
Icahn to Yahoo Chair: You're The Liar, and Here's My Plan
Sorry, Carl, We're Not Voting For Your Yahoo Proxy Plan
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| Carl Icahn tar strid mot Yahoo | | Mångmiljardären Carl Icahn kräver nu att Yahoos hela styrelse byts ut, för att företaget återigen ska gå in i förhandlingar om att bli uppköpt. Det uppger Wall Street Journal. Icahn uppges vara missnöjd med att Yahoo droppade Microsofts bud. [..] Read complete article | | Published 15-May-2008 by Nerdblog in General
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